We still prefer Pepsi

Article Excerpt

In the past decade, we’ve regularly advised buying PepsiCo and selling The Coca-Cola Co., which is the opposite of the consensus. Mind you, we have a high regard for Coca-Cola as a business. But there’s a risk in placing too much emphasis on a single product and/or a single brand name, as the company does with Coke. Then too, you need to pay attention to demographics and other key trends. We felt conventional soft drinks were sure to become harder to sell to baby boomers as they grew older and became more health conscious. In contrast, we liked PepsiCo’s mix of soft drinks and snack foods. We liked it even better when it bought the Tropicana fruit juice business. We were even more impressed when it acquired (through the Quaker Oats takeover) the Gatorade brand, a sugar-based soft drink with health food rather than junk food connotations. Its Naked Juice and vitamin-laced bottled water could also work out nicely. To top things…

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